Inside the $249B Fast Loop of McDonald's & Burger King

Have you ever noticed? Wherever you see a McDonald's, a Burger King almost certainly pops up right next door. Their menus are similar, their prices are close, and even their advertising strategies look like carbon copies of each other. We simply call this "competition." But when you dig deeper, you find something much more significant than ketchup and mayonnaise: Mathematics.

When I started researching the relationship between these two giants out of curiosity, I realized this wasn't just a fight over "whose burger is tastier," but a flawless strategic mechanism operating in the background.

My research led me to 7 of the most famous theories in the worlds of economics and biology. By combining these theories, I created a model of an infinite cycle where these two brands feed off each other, which I call the "Fast Loop."

So, which theories will we trace in this video?

• Hotelling's Law: Why do they stubbornly open stores right next to each other? (The answer is much more logical than you think.)

• Game Theory: Why do they spend billions of dollars on advertising at the cost of "burning money"?

• The Red Queen Effect: How does that famous scene from Alice in Wonderland explain today's burger wars?

• The Prisoner's Dilemma: Why do they constantly attack each other instead of cooperating?

This video is not just a "brand history" documentary. This is the story of how a $249 billion market survives through 7 different economic theories, and how the choices we believe to be "free will" are actually engineered.

In Part 2, I focused on McDonaldization, a rather famous theory that caused much debate at the time, explaining how standardization in the rational world and the way modern people act and think can change, and what we are willing to sacrifice. I also discussed whether fast food chains, even global giants, could one day go bankrupt. Could large companies like McDonald's disappear forever?

I had a lot of fun researching and piecing these parts together. I hope you enjoy watching this "Fast Loop" theory just as much.

Enjoy the video!

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Reference List:

• Hancock, J. L. (Director). (2016). The Founder [Film]. FilmNation Entertainment.

• Carroll, L. (Author), & Miller, H. (Director). (1983). Alice in Wonderland [Television film]. CBS.

• Baumol, W. J. (2004). The free-market innovation machine: Analyzing the growth miracle of capitalism. Princeton University Press.

• BBC Culture. (2016, August 30). McDonald’s golden arches: The strange story of an icon. BBC.

• https://www.bbc.com/culture/article/20160830-mcdonalds-golden-arches-the-strange-story-of-an-icon

• Britannica. (n.d.). McDonald’s. Encyclopaedia Britannica.

• https://www.britannica.com/money/McDonalds

• Carroll, L. (1983). Alice in Wonderland [Film]. BBC Television.

• Derfus, P. J., Maggitti, P. G., Grimm, C. M., & Smith, K. G. (2008). The Red Queen effect: Competitive actions and firm performance. Academy of Management Journal, 51(1), 61–80.

• Gayle, P. G., & Luo, Z. (2013). Choosing between order-of-entry assumptions in empirical entry models: Evidence from competition between Burger King and McDonald’s restaurant outlets. Journal of Industrial Economics.

• https://mpra.ub.uni-muenchen.de/51259/

• Hotelling, H. (1929). Stability in competition. Economic Journal, 39(153), 41–57.

• McDonald’s Corporation. (n.d.). McDonald’s commercials [Video]. YouTube.

• https://youtu.be/xmC1-GKu8fg

• https://youtu.be/QIuXv7Y8QA4

• https://youtu.be/TCyNIKA-uhs

• Nelson, R. R., & Winter, S. G. (1982). An evolutionary theory of economic change. Harvard University Press.

• Rhodes, J. (n.d.). The Red Queen effect. University of Maryland, Robert H. Smith School of Business.

• https://www.rhsmith.umd.edu/news/red-queen-effect

• Soto Torres, M. D., Fernández Lechón, R., & Fernández Soto, P. (2014). Through the Red Queen effect. Proceedings of the System Dynamics Society.

• https://proceedings.systemdynamics.org/2014/proceed/papers/P1093.pdf

• Sterman, J. D. (2000). Business dynamics: Systems thinking and modeling for a complex world. McGraw-Hill.

• The Founder. (2016). [Film]. The Weinstein Company.

• Transport Geography. (n.d.). Agglomeration economies.

• https://transportgeography.org/contents/chapter2/transport-and-location/agglomeration-economies/

• Van Valen, L. (1973). A new evolutionary law. Evolutionary Theory, 1, 1–30.

• YouTube. (n.d.). Red Queen effect explained [Video].

• https://www.youtube.com/watch?v=mmgfLTJr4qg

  Part 2:

• The McDonaldization of Society

• Food, Inc. (Belgesel - 2008) ve Omnivore's Dilemma (Michael Pollan).

• The Economist Magazine.

• Time Magazine ve QSR Magazine

• Fast Food Nation: The Dark Side of the All-American Meal.

• The New York Times (Makale: "The secret to why Coke tastes better at McDonald's" https://www.scribd.com/document/675879451/Coke-and-McDonald-s-Growing-Together-Since-1955-The-New-York-Times?

• https://www.bisektor.com/dunyanin-en-garip-mcdonalds-restoranlari/

• https://www.economist.com/graphic-detail/2018/01/18/return-of-the-mac

• https://www.fool.com/investing/small-cap/2004/09/03/the-stealth-toy-giant.aspx?

• https://www.marketresearchfuture.com/reports/artisan-bakery-market-3143?

• https://www.youtube.com/watch?v=bh17s9DilZw